UPN will purchase some of the former Level 3's metro network assets in the Albuquerque, New Mexico, area as part of an agreement CenturyLink made to obtain Department of Justice (DOJ) approval of its multibillion-dollar acquisition of the competitive provider.
The sale still needs to clear other government approvals, include the FCC and other customary closing conditions.
According the consent decree CenturyLink reached with the DOJ last fall, the combined company must divest certain Level 3 metro network assets and certain dark fiber assets.
Financial terms of the agreement were not disclosed.
For UPN, which has continued to expand its network presence throughout the Midwest and other regions, the acquisition will enable it to gain a deeper foothold with business and wholesale customers in Albuquerque.
Jason Adkins, president of Unite Private Networks, told FierceTelecom that this acquisition will enhance its on-net fiber and overall fiber footprint.
“By purchasing the Level 3 assets, we end up with 300 miles of fiber and over 600 on-net lit buildings,” Adkins said. “It accelerates our presence very quickly in the Albuquerque market so it made it irresistible to go after these assets.”
On the metro network side, the new CenturyLink was required to divest Level 3 metro network assets in three metro areas: Albuquerque, Boise, Idaho, and Tucson, Arizona. The combined company will continue to serve all current Level 3 customers unless they choose to be served by the buyer of divested assets in each metro area.
When CenturyLink completes the Albuquerque network asset sale to UPN, part of that commitment will be met.
CenturyLink will continue to serve all former Level 3 customers in Albuquerque unless they choose to be served by UPN following the closing of the sale. Where needed to provide uninterrupted service to its customers in Albuquerque, CenturyLink will purchase network connectivity and services from UPN.
Deepening network presence
The service provider is hardly a stranger to Albuquerque. In 2017, UPN won a deal to provide services to the city’s school district.
But the deal is not just about serving business customers alone.
UPN will be offering wholesale services to CenturyLink and others.
“We fully expect to do carrier business in Albuquerque,” Adkins said. “Also, CenturyLink will be a big wholesale customer for us because they’ll need to buy services from us for some period of time.”
Focus on tuck-in deals, organic growth
In recent years, UPN has continued to expand its network presence to satisfy a mix of wholesale backhaul and business services opportunities.
UPN currently serves over 300 communities across 20 states, with over 7,600 metro fiber route miles and 4,500 on-net buildings.
The service provider obtained a $273 million credit facility to support ongoing fiber network expansions that will support its growing base of enterprise and wireless operator customers in 2015.
Besides winning the school district deal in Albquerque, UPN won large-scale dark fiber wireless contracts in Nebraska as well as launching a 4×100 Gigabit wavelength service in the Dallas/Fort Worth metro to satisfy one of the region's largest retail chains.
While the Albuquerque assets are UPN’s latest deal, this certainly won’t be its last.
Adkins said UPN continually looking at similar regional fiber deals that add scale to its current network.
“We consider this a tuck in acquisition,” Adkins said. “Organic growth has been great and it’s going to be more of the same tuck-in approach.”
Adkins added that “we kick the tires on things that come out and if we find something that looks good we’ll pursue it.”